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The Ministry of Finance and Economic Planning has made it clear that sachet water is exempted from the 20 percent ad-valorem tax which came into force yesterday, suggesting that the reported increase in the price of sachet water across the country is illegal. The Act of Parliament which imposed the tax (Act 787) specified �distilled, bottled and other packaged water,� but according to the Finance Minister, Dr Kwabena Duffour, the intention of the policy makers was not to tax sachet water. He explained in an interview with the Daily Graphic in Accra yesterday that the ministry had not touched the law in any form but he believed that since sachet water was an identifiable item with a specific name, it would have been expressly captured as �sachet water� under the act if the rationale for the policy was to impose a tax on it and not try to label it as �other packaged water.� He said the Finance Ministry had set up an internal technical committee to understand sachet water production, sales and environmental issues to decide on how to deal with all issues relating to the sub-sector. Dr Duffour further posited that taxation was not only for revenue mobilization but also to ensure equity and discourage certain habits, such as bad environmental practices, adding that the committee would also study the impact of sachet water on the environment and how it could be curtailed. Already, the technical committee has met with all the stakeholders in the water production sub-sector and agreed that the tax would not affect sachet water.